So we learned this week that Tesla will start production of the Model 3 on time. That's a surprise for the company. That's also the end of the good news.
Tesla claimed they would produce 200,000 by the end of 2017. That figure has been revised down to 20,000 - 10% of what they promised. Which is largely what everyone with any common sense predicted, because there was no way Tesla was ever going to meet their target - they still don't have the capacity to build cars at the rate required to make those sorts of numbers. According to Tesla, the sales figure issue stems from a "severe production shortfall" of 100 kWh battery packs. This in turn is because their gigafactory is both late getting up to full speed, and running into production and QA issues in the parts of the factory that are operating (the gigafactory is a phased factory, meaning they're already in production at one end of the facility while the other end is still being built and fitted out). This is classic Tesla, with Musk personally overselling something and Tesla ending up under-delivering.
Add to that the increasing wariness about the Model 3 by both customers and the motoring press because at this late stage there are still no official photos or information of the production-ready version of the car. Pile on to that the sales figures released this week that show sales of the Model S are 'flat' and the Model X are 'declining' and the result of all of this is that the Tesla share price is down 20% from last week.
But wait! There's more!
The Model S just failed a crash test; the offset-frontal test is one of the most common accidents in almost every country in the world. It happens when cars turn across oncoming traffic and about 35% of the front of the car hits the same 35% of the front of the opposing car. This is the one test that every manufacturer wants to ace because it's so important and so common. It's been around in Europe since the late 1990s and the IIHS introduced it in America in 2012. Notable failures to date include the Dodge Challenger and Fiat 500.
The Model S was put through its paces and passed four of the crash tests but failed the critical offset-frontal crash, giving it a score rating of "acceptable" - which translates to a four star safety rating, not five. The reason was because the driver dummy smashed it's head on the steering wheel and driver's side A pillar, through the airbag, the front wheel shattered, and the brake caliper and rotor penetrated the passenger compartment.
So Tesla's stock price will likely drop a little more when the market opens on monday - how much nobody knows but don't be surprised if this drop totals 25% by the middle of next week. I'm not a stock-watcher but even in I know that when a company loses 20% of it's share price in a week, that's A Bad Thing.
